Gold Miners Bounce Back as Producer Positioning Turns Bullish
The VanEck Gold Miners ETF (GDX) has bounced back from around $72 support and is showing signs of recovery, according to recent analysis. The GDX has been making higher lows, creating a favorable risk-reward setup for investors. This comes as gold miners fell harder than gold itself after the peak, but their high-beta exposure means a sustained rally could quickly reverse that gap.
Producer positioning is also turning bullish, with miners rebuilding long exposure while increasing hedges, suggesting they expect higher gold prices. GDX's covered holdings are projected to deliver 14% EPS growth next year, while trading near 10.5x earnings - a combination considered buyable. However, oil above $85 may temporarily cap gold prices.
The author has a long position in GLD, GDMN, GLTR, and GDX through stock ownership or other derivatives. The analysis was written independently, without compensation from Seeking Alpha or any company mentioned.